XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) stalled its recent downside momentum and posed a weak recovery on Wednesday. The pair swung between gains and losses and finally ended the day higher at 1156.70. Gold prices dropped to fresh four month lows of 1147.16, although failed to breach the strong trend line support. XAU/USD bounced-off lows and swung higher to 1164.68 before retreating below 1160 at close.
XAU/USD extends its recovery for the second straight session today as the USD bulls took a back seat amid re-emergence of risk-on trades as Chinese stocks stabilize on the latest government measures while traders also anticipate a Greek deal to be struck soon. At the moment, XAU/USD trades around 1164 levels, having posted session highs at 1166.61. The pair retraced from highs as it faced major resistance at 10-DMA located at 1167.30. Moreover, the greenback is expected to remain lower on FOMC minutes released on Wednesday which reveal that the Fed appeared cautious regarding rate-hike decision.
Technically, on daily charts, the pair is expected to extend its upward moves and could rise to next resistance located around 1070 levels, beyond a break of 10-DMA placed at 1167.30. Above which doors will open up for a test of 20-DMA located at 1176.14. The daily RSI at 40.56 aims sharply higher, indicating further upside bias persists. However, a break below daily lows at 1155.93 selling pressure may intensify, pushing the pair lower towards 1150 levels.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) extends losses and finished lower on Wednesday at 1044.84, having bounced-off strong 200-DMA support located at 1041 levels. The pair declined yesterday as the shared currency climbed higher backed by renewed optimism surrounding Greece as the debt-ridden nation submitted a new ESM three-loan request to the Euro group while markets remains positive ahead of Sunday’s final make it or break it Euro Summit. The pair remained well within the triangle formation, restricted by the trend line resistance at 1054 levels.
As for today’s trade, XAU/EUR halted its 3-day decline and edged higher once again finding good support at 200-DMA located at 1041.67. However, the pair faced rejected at 1050.03 levels with 5-DMA lying there, acting as a strong resistance. The pair is expected to give back gains and fall back in red as the euro remains well bid versus the US dollar amid Greek hopes and risk-on sentiment. However, the recovery could extend up to the triangle trend line resistance located at 1053.24. The daily RSI hovers around 46 and aims higher suggesting further gains ahead. However, a failure to breach the last, XAU/EUR may rebound lower and fall back to the 200-DMA support.
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